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COMMONWEALTH OF MASSACHUSETTS SUFFOLK, ss. SUPERIOR COURT CIVIL ACTION No. 17-00218-BLS1 MONICA DEOLIVEIRA1 vs. LIBERTY MUTUAL INSURANCE COMPANY MEMORANDUM OF DECISION AND ORDER ON DEFENDANT’S MOTION TO DISMISS Plaintiff, Monica DeOliveira, seeks to recover from her automobile insurer, defendant, Liberty Mutual Insurance Company (Liberty), under a Massachusetts Automobile Insurance Policy (Policy). DeOliveira alleges that Liberty improperly failed to pay benefits under the Medical Payments (MedPay) provision of the Policy. DeOliveira’s Second Amended Complaint (Complaint) asserts three claims against Liberty: breach of contract (Count I), declaratory judgment (Count II), and violation of G.L. c. 93A (Count III).2 Liberty moves to dismiss all three claims for failure to state a claim upon which relief can be granted under Mass. R. Civ. P. 12(b)(6).3 For the reasons stated below, Liberty’s motion to dismiss is denied. 1 On behalf of herself and all others similarly situated. 2 DeOliveira filed a Motion for Leave of Court to File a Second Amended Complaint on August 16, 2017, after the parties filed their memoranda on Liberty’s motion to dismiss. On August 18, 2017, this court allowed DeOliveira to file the Second Amended Complaint and noted that if new allegations in that version of the Complaint required supplemental briefing, the parties could file written memoranda on the date of the oral argument on the motion to dismiss. The parties declined to file supplemental memoranda. 3 Liberty also moves to dismiss on the ground of insufficiency of service of process. The motion to dismiss on that ground is denied. On April 18, 2017, DeOliveira filed a motion to BACKGROUND The facts as revealed by DeOliveira’s Complaint are as follows. DeOliveira is a resident of Worcester, Massachusetts. Liberty is a Massachusetts corporation with a principal place of business in Boston, Massachusetts. On October 28, 2010, DeOliveira purchased the Policy from Liberty. The Policy is attached to the Complaint as Exhibit A. The Policy includes up to $ 8,000 in personal injury protection (PIP) benefits. It also includes an optional coverage for up to $ 5,000 in MedPay benefits. DeOliveira paid an additional premium of $ 10 per vehicle for two vehicles for the MedPay coverage. The Policy’s MedPay provision (Part 6) states, in part: “Under this Part, we will pay reasonable expenses for necessary medical and funeral services incurred as a result of an accident. We will pay for expenses resulting from bodily injuries to anyone occupying your auto at the time of the accident.” In addition, the MedPay provision states that: “We will not pay under this Part for any expenses that are payable, or would have been payable except for the deductible, under the PIP coverage of this policy or any other Massachusetts auto policy.” The Policy’s PIP provision provides coverage for three kinds of benefits: (1) medical expenses, (2) lost wages, and (3) replacement services. The PIP provision also states, in part: Some people have a policy of health, sickness, or disability insurance or a contract or agreement with a group, organization partnership or corporation to provide, pay for, or reimburse the cost of medical expenses (“health plan”). If so, we will pay up to $ 2,000 of medical expenses for any injured person. We will also pay medical expenses in excess of $ 2,000 for such injured person which will not be paid by a health plan. Medical expenses must be submitted to the health plan to determine what the health plan will pay before we pay benefits in excess of extend the date for service of process that was allowed by the court (Kaplan, J.). -2- $ 2,000 under this Part. We will not pay for medical expenses in excess of $ 2,000 that the health plan would have paid had the injured person sought treatment in accordance with the requirements of the health plan. In any case, our total payment for medical expenses, lost wages and replacement services will not exceed $ 8,000. On June 7, 2011, DeOliveira operated a motor vehicle that was involved in a collision. She suffered personal injuries as a result of the collision. As a result of the collision, DeOliveira received reasonable and necessary medical care and treatment for personal injuries, the cost of which totaled $ 4,004.30. She notified Liberty of the loss and submitted her medical bills to Liberty. Liberty paid DeOliveira $ 2,000 in PIP benefits. On October 25, 2011, Liberty issued a PIP exhaustion letter to DeOliveira, which is attached to the Complaint as Exhibit C. The PIP exhaustion letter states, in part: Please be advised that the $ 2,000.00 Personal Injury Protection coverage on this claim has been exhausted. Please submit all outstanding medical bills to your private health carrier. If your health carrier denies payment or only pays a portion of the bill, please forward a copy of their explanation of benefits to the address listed in the letterhead so that I may review it for any necessary payments. DeOliveira submitted reasonable and necessary medical bills and expenses totaling $ 2,004.30 to her health insurance carrier, Fallon Community Health Plan (Fallon). DeOliveira’s health insurance policy with Fallon did not contain a provision deferring to payment under the MedPay provision of her Policy. Fallon paid the $ 2,004.30 in medical bills and expenses. On April 23, 2012, Fallon asserted a statutory lien of $ 791.49 against DeOliveira’s third party personal injury claim arising from the collision (Fallon lien). Over a year later, on September 3, 2013, DeOliveira settled her personal injury claim with the tortfeasor involved in the June 7, 2011 collision. The tortfeasor paid DeOliveira as a result of -3- the settlement. Shortly thereafter, DeOliveira paid the Fallon lien, in full, from proceeds she received from the settlement. On August 29, 2013, DeOliveira sought payment from Liberty under the terms and conditions of the Policy’s MedPay provision. The Fallon lien was itemized to indicate the bills that Fallon paid. DeOliveira asserted that the medical bills and expenses in excess of $ 2,000 that were covered by Fallon and not payable under the PIP provision of the Policy were covered under the MedPay provision. Complaint at paras. 36-37. Liberty, however, refused to pay DeOliveira under the MedPay provision of the Policy. On January 20, 2017, DeOliveira filed this action against Liberty. DeOliveira claims that Liberty breached the Policy by failing to provide her with MedPay coverage and that this conduct violated Chapter 93A. She brings this putative class action on behalf of herself and all persons similarly situated. She seeks to define the class as, “all persons who purchased one of Defendant’s Massachusetts automobile insurance policies with MedPay coverage and/or were covered under one of Defendant’s Massachusetts automobile insurance policies with MedPay coverage who sustained personal injuries and incurred medical bills and expenses as a result of an automobile accident and reached the $ 2,000 initial PIP exhaust[ion] level.” ANALYSIS To survive a motion to dismiss, the plaintiff’s “[f]actual allegations must be enough to raise a right to relief above the speculative level . . . [based] on the assumption that all the allegations in the complaint are true (even if doubtful in fact) . . . .” Iannacchino v. Ford Motor Co., 451 Mass. 623, 636 (2008), citing Bell Atl. Corp. v. Twombly, 127 S. Ct. 1955, 1964-1965 (2007). In other words, “[w]hile a complaint attacked by a . . . motion to dismiss does not need -4- detailed factual allegations . . . a plaintiff’s obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and conclusions . . . .” Iannacchino, 451 Mass. at 636, quoting Bell Atl. Corp., 127 S. Ct. at 1966. Dismissal under Mass. R. Civ. P. 12(b)(6) is proper where a reading of the complaint establishes beyond doubt that the facts alleged do not support a cause of action which the law recognizes, such that the plaintiff’s claim is legally insufficient. Nguyen v. William Joiner Center for the Study of War and Social Consequences, 450 Mass. 291, 295 (2007). DeOliveira’s Complaint asserts substantially similar facts and claims to those presented in a case in which the Appeals Court affirmed, in an unpublished Rule 1:28 decision, a decision of the District Court in favor of the insured. Kirby v. Liberty Mutual Ins. Co., 89 Mass. App. Ct. 1136, 2016 WL 4162351, at *1-*3 (August 5, 2016) (Rule 1:28), rev. den., 476 Mass. 1106 (Nov. 30, 2016). In Kirby, the plaintiff sustained injuries in an automobile accident and incurred $ 13,387.56 in medical expenses. Id. at *1. At the time of the accident, plaintiff was insured under a health insurance policy and a Massachusetts automobile policy issued by Liberty that provided $ 8,000 in PIP benefits and $ 5,000 in MedPay coverage. After the accident, Liberty notified plaintiff that her $ 2,000 in PIP coverage was exhausted and that she should submit all outstanding medical bills to her health insurance provider.4 As a result, her health insurer paid $ 4,956.67 in additional medical expenses. The health insurer executed a lien for that amount in the civil action that Kirby filed against a third-party tortfeasor. Plaintiff later paid $ 4,956.67 to her health insurer to satisfy and release the lien. Thereafter, plaintiff submitted a claim to Liberty 4 Liberty paid a total of $ 3,283.92 in PIP benefits for medical expenses that plaintiff incurred–$ 2,000 in initial PIP benefits and $ 1,283.92 in PIP benefits to cover copayments and other medical expenses denied by plaintiff’s health insurer. -5- under the MedPay portion of her automobile insurance policy for reimbursement of the $ 4,956.67. Liberty refused coverage under MedPay, and plaintiff filed suit for breach of contract against Liberty in the District Court. After a hearing, a District Court judge allowed plaintiff’s motion for summary judgment, and Liberty appealed to the Appellate Division of the District Court, which affirmed the summary judgment ruling in favor of plaintiff. See Kirby v. Liberty Mutual Ins. Co., 2014 Mass. App. Div. 190 (Sept. 25, 2014). Liberty appealed, and the Appeals Court affirmed. See Kirby v. Liberty Mutual Ins. Co., 2016 WL 4162351 at *1. The Appeals Court noted that the case was governed in all material respects by Golchin v. Liberty Mut. Ins. Co., 460 Mass. 222 (2011) (Golchin I ), and Golchin v. Liberty Mut. Ins. Co., 466 Mass. 156 (2013) (Golchin II ). Kirby v. Liberty Mutual Ins. Co., 2016 WL 4162351 at *2 (discussing Golchin I and Golchin II). Ultimately, the Appeals Court concluded that plaintiff was entitled to MedPay benefits because she “incurred” the $ 4,956.67 in expenses and PIP benefits in excess of the $ 2,000 paid were not available to her. Id. at *2-*3. DeOliveira pleads facts in her Complaint that are closely similar to the factual scenario in Kirby.5 In light of Kirby, 6 which I find persuasive, I conclude that DeOliveira’s Complaint properly asserts claims for breach of contract, declaratory judgment, and violation of Chapter 5 Here, as in Kirby, DeOliveira asserts in her Complaint that she “incurred” additional medical expenses after her PIP benefits were exhausted or unavailable. See Kirby v. Liberty Mutual Ins. Co., 2016 WL 4162351 at *1-*2. See also Golchin II, 466 Mass. at 163 (determining that medical expenses were clearly “incurred” within plain language of auto policy, first by plaintiff’s health insurer, and later when plaintiff satisfied lien placed by her health insurer, and thus, plaintiff was entitled to recover MedPay benefits under auto policy). 6 As Kirby progressed through the courts, a total of seven judges agreed that Liberty was liable for breach of contract by failing to provide plaintiff with MedPay coverage. -6- 93A.7 See Chace v. Curran, 71 Mass. App. Ct. 258, 260 n.4 (2008) (noting that an unpublished memorandum and order issued pursuant to Appeals Court Rule 1:28 has persuasive, but not precedential, authority). See also Bonin v. Amica Mutual Ins. Co., SUCV2014-04073-BLS2, slip. op at 1 (Mass. Super. Ct. Sept. 9, 2015) (Sanders, J.) (denying defendant insurer’s motion to dismiss claims for breach of contract and violation of Chapter 93A based on failure to provide MedPay coverage under automobile insurance policy). Accordingly, Liberty’s motion to dismiss is denied. CONCLUSION Defendant Liberty Mutual Insurance Company’s Motion to Dismiss is DENIED. By the Court, ______________________________ Edward P. Leibensperger Justice of the Superior Court Dated: September 29, 2017 7 At oral argument, counsel for Liberty acknowledged that I would have to disagree with the reasoning in Kirby to grant Liberty’s motion to dismiss. I do not disagree. -7-read more

1 COMMONWEALTH OF MASSACHUSETTS SUFFOLK, ss. SUPERIOR COURT SUCV2015-02554-BLS2 SAFETY INSURANCE COMPANY vs. LAURA CHAU & NAKOUZI ENTERPRISES, INC. d/b/a UNION AUTOMOTIVE MEMORANDUM OF DECISION AND ORDER ON PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT Plaintiff Safety Insurance Company (Safety) filed this action to determine its coverage obligations with respect to a motor vehicle accident which is the subject of separate litigation. The defendant Laura Chau was allegedly injured in that accident and in that separate lawsuit, seeks to recover against Nakouzi Enterprises, Inc. d/b/a Union Automotive (Nakouzi), which is Safety’s insured. The Complaint seeks a declaration both as to Safety’s duty to defend Nakouzi and its duty to indemnify. The matter is now before this Court on Safety’s Motion for Summary Judgment. This Court concludes that Safety does have a duty to defend, but that the obligation to indemnify cannot be decided at this juncture because of fact disputes as to what caused the accident. BACKGROUND The summary judgment record contains the following relevant facts. In June 2015, Chau filed a lawsuit against David Lam and Nakouzi in Plymouth Superior Court seeking to recover for injuries she suffered in an accident that occurred while she was driving Lam’s car. See Chau v. Lam et al., Civ. No. 2015-00589 (the Plymouth Action). The complaint filed in the 2 Plymouth Action alleges that, prior to the accident, Nakouzi had issued a Certificate of Inspection for the vehicle despite the fact that its tires had heavily worn treads that did not comply with the state’s safety requirements for tire tread depth. As a result of Nakouzi’s negligence, Chau mistakenly believed that Lam’s vehicle was safe to drive and that the accident occurred because the worn tire treads led her to lose control of the car and collide with oncoming traffic. The Plymouth Action is still pending. At the time of the accident, Nakouzi was the named insured on a Massachusetts garage insurance policy issued by Safety (the Policy). The Policy provided two types of liability coverage for injuries resulting from “garage operations” — specifically, a) coverage for injuries from garage operations involving the ownership, maintenance and use of covered “autos,” and b) coverage for injuries from garage operations other than the ownership, maintenance, and use of covered “autos.” The parties agree that Lam’s car was not a covered auto, so it is the second type of liability coverage that is relevant here. As to both types of liability coverage, Safety was required to pay all sums its insured was legally required to pay as damages for bodily injury or property damage provided that such injury or damage was “caused by an ‘accident’ and resulting from ‘garage operations.’” Garage Operations was defined to include “all operations necessary or incidental to a garage business.” See Section IX.H, page 23 of Policy. If suit was filed against Nakouzi seeking damage for bodily injury or property damage, Safety acknowledged that it had a duty to defend, provided that such injury or damage was covered by the Policy. See Section IV.A, page 5 of Policy (“We have the right and duty to define any ‘insured’ against a ‘suit’ asking for these damages even if it is without merit”). 3 After Chau filed the Plymouth Action, Nakouzi sought coverage from Safety under the Policy. Safety agreed to defend Nakouzi in Chau’s suit under a reservation of rights, then filed the instant action. DISCUSSION It is well established that the duty to defend and the duty to indemnify are distinct and independent obligations. See A.W. Chesterton Co. v. Massachusetts Insurers Insolvency Fund, 445 Mass. 502, 527 (2005). The duty to defend arises at the outset of litigation against the insured. It is triggered as long as the allegations in the complaint brought in the underlying action “are reasonably susceptible of an interpretation that states or roughly sketches a claim covered by the policy terms.” Billings v. Commerce Ins. Co., 458 Mass. 194, 200 (2010). “There is no requirement that the facts alleged in the complaint specifically and unequivocally make out a claim within the coverage.” Id. at 201, quoting Sterilite Corp. v. Continental Cas. Co., 17 Mass. App. Ct. 316, 319 (1983). The duty to indemnify, in contrast, arises at the close of litigation. It is triggered “when a judgment within the policy coverage is rendered against the insured.” Boston Symphony Orchestra, Inc. v. Commercial Union Ins. Co., 406 Mass. 7, 10 (1989). Whether the duty exists is determined based on the actual facts proven at trial, rather than what may have been suggested by the general allegations in the complaint. See id. at 10-11. The duty to indemnify is thus narrower than the duty to defend. See Transamerica Ins. Co. v. KMS Patriots, 52 Mass. App. Ct. 189, 196 (2001). Accordingly, “[a]n obligation to indemnify does not automatically follow from the existence of a duty to defend.” Polaroid Corp. v. The Travelers Indem. Co., 414 Mass. 747, 762 n.19 (1993). That is, an insurer may have a duty to defend but ultimately have no duty to indemnify 4 As noted above, the Policy provides liability coverage for injuries “caused by an ‘accident’ and resulting from ‘garage operations.’” “Garage operations” is defined to include, among other things, “all operations necessary or incidental to a garage business.” Safety argues that it has no duty to defend because Nakouzi’s inspection was not a “garage operation.” If there is no duty to defend, then it necessarily follows that there can be no duty to indemnify. There are no Massachusetts appellate decisions interpreting the relevant provisions. Although the parties cite cases from the Massachusetts federal district court and other jurisdictions, they are not particularly helpful in that they involve different policy language or arise from different circumstances. Thus, to determine whether Safety’s reading of the Policy is correct, this Court relies on the general rules that govern the interpretation of insurance contracts. When interpreting an insurance policy, the Court construes the policy’s words in “their usual and ordinary sense.” Hakim v. Massachusetts Insurers’ Insolvency Fund, 424 Mass. 275, 280 (1997). Each word “must be presumed to have been employed with a purpose and must be given meaning and effect whenever practicable . . . without according undue emphasis to any particular part over another.” Boston Gas Co. v. Century Indem. Co, 454 Mass. 337, 355 (2009). (internal citations and quotations). If the meaning of the policy language is unclear, the Court considers “what an objectively reasonable insured, reading the relevant policy language, would expect to be covered.” Metropolitan Life Ins. Co. v. Cotter, 464 Mass. 623, 635 (2013), quoting Hazen Paper Co. v. United States Fid. & Guar. Co., 407 Mass. 689, 700 (1990). Applying these principles, the Court concludes that the Policy requires Safety to defend Nakouzi against the claims Chau asserts against it because the inspection constituted a “garage operation” as defined by the Policy. 5 The Policy defines “garage operations” expansively to include not just activities “necessary” to a garage business but also “all” activities that are “incidental” to the business, i.e., ones that play a small or even insignificant role. See Black’s Law Dictionary (10th ed. 2014) (defining incidental as “[s]subordinate to something of greater importance; having a minor role”); The American Heritage Dictionary of the English Language (5th ed. 2017) (defining incidental as “of a minor, casual, or subordinate nature”). In this Court’s view, inspections are clearly incidental to a garage’s operations. Certainly, it is not at all unusual for motor vehicle service stations and automobile repair shops to conduct vehicle inspections. An insured in Nakouzi’s position, reading the relevant Policy language, would reasonably expect that accidents arising from inspections conducted at his garage would be covered. Since Chau in the Plymouth Action alleges that her accident was caused by Nakouzi’s negligent inspection, Safety is therefore required to defend Nakouzi. As Safety acknowledged at the hearing on this motion, its assertion that it has no duty to indemnify is based on its contention that it has no duty to defend. It conceded that, if the Court finds that it has a duty to defend Nakouzi, the Court cannot make a summary determination on whether Safety has a duty to indemnify because Chau’s lawsuit against Nakouzi remains pending. Summary judgment regarding Safety’s indemnification obligations is therefore inappropriate. CONCLUSION AND ORDER For all of the foregoing reasons, Safety’s Motion for Summary Judgment that is has no duty to defend is DENIED. Because there are no material facts in dispute regarding that duty, it is further ORDERED, however, that judgment enter in favor of Nakouzi declaring that Safety does have a duty to defend in the Plymouth Action. Because the duty to indemnify cannot be 6 determined until the Plymouth Action is resolved, this Court schedules this matter for December 5, 2017 at 2:00 p.m. so that it may be apprised of the status of that action. If the parties wish to have a Rule 16 conference before that date, they may request an earlier date from the court clerk. ______________________________ Janet L. Sanders Dated: September 15, 2017 Justice of the Superior Courtread more

COMMONWEALTH OF MASSACHUSETTS SUFFOLK, ss. SUPERIOR COURT CIVIL ACTION No. 2016-2521 BLS 1 CASELLA WASTE SYSTEMS, INC. et al1 vs. STEADFAST INSURANCE COMPANY MEMORANDUM AND ORDER ON STEADFAST INSURANCE COMPANY’S MOTION FOR SUMMARY JUDGMENT This is an insurance coverage dispute between a company engaged in the landfill business and its insurer. The insurer, defendant Steadfast Insurance Company, issued a policy called Z Choice Pollution Liability (the “Policy”) to plaintiff, Casella Waste Systems, Inc., naming Casella and its subsidiary, Southbridge Recycling & Disposal Park, Inc. (“SRDP”), as insureds. The Policy covers claims made against the insureds during the Policy period of April 30, 2015 to June 15, 2016. Following notification by Casella in October 2015 to the Massachusetts Department of Environmental Protection (“DEP”) of the detection of pollution flowing from Casella’s property to neighboring property, a claim by DEP, as defined in the Policy, arose. Casella sought insurance coverage for the claim. Steadfast denied coverage. Casella sued for breach of contract, violation of G.L. c. 93A and for a declaration of coverage. Steadfast now moves for a summary judgment declaring there is no coverage under the Policy. For the reasons described below, summary judgment must be denied because there are material issues of fact that 1 Southbridge Recycling & Disposal Park, Inc. 1 are genuinely in dispute. BACKGROUND The following facts are taken from the parties’ Statement of Undisputed Material Facts and Responses Thereto (“SUMF”), supplemented by documents and affidavits in the summary judgment record. The coverage at issue under the Policy is what was provided under Coverage C: Cleanup Costs – New Pollution Event. Under Coverage C, Steadfast is obligated to pay “cleanup costs” to the extent resulting from a “new pollution event” that migrates beyond the boundaries of a “covered location” if that “new pollution event” is first “discovered” during the policy period. The obligation to pay includes “cleanup costs” that the insured is legally obligated to pay resulting from a third-party “claim.” The Policy also contains an exclusion from coverage for a “known pollution event.” The words in quotes are defined terms in the Policy. Casella seeks to be reimbursed and indemnified by Steadfast for all past and future cleanup costs incurred on account of a claim by DEP. There is no dispute that (i) Casella incurred cleanup costs, as defined, (ii) arising from migration of pollution from a covered property, as defined, and (iii) Casella received and reported to Steadfast a claim, as defined, coming from DEP. The dispute between the parties that is the crux of this lawsuit is whether the DEP claim resulted from a “new pollution event” that first commenced in the Policy period and was not known by Casella prior to the commencement of the Policy The DEP claim concerns a landfill in the Town of Southbridge, Massachusetts operated by plaintiff/insured SRDP. Beginning in 2002, the landfill began an annual residential well monitoring program under which residents within ½ mile of a portion of the landfill could 2 request testing of their potable wells. On October 23, 2015, Casella, by its consultant, gave notice to DEP that SRDP’s well testing in September 2015 had detected certain contaminants above applicable standards in the wells of three residences. The three residence were along a road called H. Foote Road and the addresses were 65, 74 and 81 H. Foote Road. Of the three residences, it was only at 65 where two contaminants – – trichloroethene (“TCE”) and 1,1-dichloroethene (“DCE”) were detected in the well water at concentrations greater than the Massachusetts Maximum Contaminant Level (“MMCL”). In fact, the detection of TCE and DCE at 65 H. Foote Road was nearly double the applicable MMCLs. This was the first time since the well testing program had begun that TCE and DCE were detected at concentrations above the MMCLs in any residential well that participated in the program. The residence at 65 H. Foote Road had not participated in the well testing program until December 2014, and its drinking water was not tested until September 24, 2015. The notice to DEP also referenced that another contaminant, 1,4 dioxane (“Dioxane”), was detected in the well water of all three residence at 65, 74 and 81 H. Foote Road. The concentration levels were all above the Massachusetts Drinking Water Guideline. Also, TCE and DCE were found in the water of 81 H. Foote Road at levels below MMCL. Prior to the September, 2015 detection of TCE and DCE at levels above MMCL at 65 H. Foote Road, there had been detections, as part of the well testing program, of TCE and DCE below MMCL, as well as detections above reportable conditions of Dioxane in the drinking water supply of some of the residences on H. Foote Road. None of these detections, however, caused Casella to be assigned a release tracking number under the 21-E Program or to be designated as a potentially responsible party. No claim was asserted by DEP and no remedial 3 action was required because of these earlier detections. As a result of the notice to DEP in October 2015, the DEP for the first time assigned a Release Tracking Number pursuant to its 21-E Program and identified SRDP as a potentially responsible party for cleanup costs. Casella prepared, as required by DEP, an Immediate Response Action Plan which was subsequently approved by DEP. In March 2017, Casella reached an agreement in principle with the Town of Southbridge, the Town of Charlton and the DEP to resolve the DEP claim. The agreement in principle was later finalized by way of an Administrative Consent Order in May 2017, providing, among other things, for the sharing of costs between DEP and SRDP of up to $ 10 million to install a municipal waterline in the Town of Charlton. Casella became legally obligated to pay cleanup costs and take other remedial action. Casella incurred more than $ 2.5 million in cleanup costs in connection with the DEP claim and expects to incur additional costs. On December 15, 2015, Casella provided notice to Steadfast of an occurrence or claim by attaching a letter from Casella’s consultant to DEP. By letter dated April 8, 2016, Casella notified Steadfast of the DEP claim. Steadfast denied coverage for the DEP claim, by letter dated April 27, 2016, based on the “known pollution event” exclusion. This lawsuit followed. DISCUSSION A claim cannot be resolved on a motion for summary judgment where “a reasonable jury could return a verdict for the nonmoving party.” Dennis v. Kaskel, 79 Mass. App. Ct. 736, 741 (2011), quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). For this reason, in evaluating the motion for summary judgment the court “must . . . draw all reasonable inferences” from the evidence presented “in favor of the nonmoving party,” as a jury would be 4 free to do at trial. Godfrey v. Globe Newspaper Co., Inc., 457 Mass. 113, 119 (2010). A request for summary judgment must be denied where a claim turns on disputed issues of fact or on disputed inferences from admitted facts. See Molly A. v. Commissioner of Dept. of Mental Retardation, 69 Mass. App. Ct. 267, 284 (2007)(“summary judgment cannot be granted if the evidence properly before the motion judge reveals a genuine issue of disputed material fact”); Flesner v. Technical Communications Corp., 410 Mass. 805, 811-812 (1991) (“Where a jury can draw opposite inferences from the evidence, summary judgment is improper.”). Here, there are at least two major disputes of fact that are material to the legal issue of whether insurance coverage exists under the Policy. Those disputes are (1) whether a relevant “pollution event” was known to a “responsible insured” prior to the commencement of the Policy, and (2) whether the “claim” submitted by Casella to Steadfast resulted from a “new pollution event.” The disputes coalesce around the events at 65 Foote Road. (1) Knowledge of Pollution Event In SUMF Nos. 19, 20 and 45, Steadfast asserts that a 2006 collection of samples of water at 65 H. Foote Road showed some level of TCE and DCE. Steadfast claims that the samples were part of the residential well program of testing by SRDP. Casella denies these facts, based on affidavits stating that the 2006 detections were not part of its well program. The affidavits aver that the 2006 results were not known by Casella until late 2015. In SUMF No. 85, a statement of fact submitted by Casella, Steadfast then admits that Casella was not aware of the 2006 report of TCE and DCE at 65 H. Foote Road before April 2015 (the commencement of the Policy). This contradiction suggests an unresolved issue of fact. Moreover, Steadfast contends in response to SUMF No. 85 that detection by Casella’s well testing program prior to 2015 at other residences 5 on H. Foote Road revealed at least some level of TCE and DCE in the water migrating to the residences along H. Foote Road. While not stated with precision, Steadfast appears to argue that the known pollution along H. Foote Road may be sufficient to ascribe knowledge of pollution at 65 H. Foote Road to Casella. Thus, the facts of what did Casella know and when did it know it, are at issue. The insurance provided by the Policy does not apply to a “pollution event” that was known to Casella before the commencement of the Policy. A “pollution event” is defined in the Policy to mean “the discharge, release, or escape of any solid, liquid, gaseous or thermal irritant, contaminant or pollutant . . . into or upon land . . . or any watercourse or body of water including groundwater.” Whether there was a pollution event known to Casella prior to the commencement of the policy at 65 H. Foote Road or at any other relevant residences presents factual issues that must be determined by a jury. (2) What Caused the Claim The question of what caused DEP’s claim brings the focus to 65 H. Foote Road. That is because Steadfast’s obligation to pay under the Policy is triggered when Casella is legally obligated to pay “as a result of” a “claim.” The Policy defines “claim” as a “written demand or written notice received by the ‘insured’ alleging liability or responsibility on the part of the ‘insured.’” There does not appear to be any dispute that the “claim” in this case is the assertion of liability of SRDP and Casella by DEP.2 It is the position of Casella that the claim by DEP “resulted from” (quoting the language of 2 On March 9, 2016, Casella provided Steadfast with notice of a letter from legal counsel to residents in the surrounding area of H. Foote Road. That letter threatened a lawsuit under federal law for the alleged contamination of drinking water. By letter dated April 5, 2016, 6 the Policy) the discovery in September 2015, of TCE and DCE at levels in excess of MMCL at 65 H. Foote Road. Stated another way, Casella contends that but for the discovery of high levels of TCE and DCE at 65 H. Foote Road, there would not have been a DEP enforcement proceeding or a claim at all. In SUMF No. 79, Casella states “[i]t was not until the detection in the drinking water of TCE and 1,1 DCE above the MMCLs – – which had never occurred previously as part of the Well Program – – that Casella was faced with a Claim in connection with the Well Program identifying SRDP as a PRP under M.G.L. c. 21E and mandating that Casella incur extensive ‘cleanup costs’ in the form of a submission of an Immediate Response Action plan and the performance of extensive remediation in accordance with M.G.L. c. 21E.” Steadfast disputes SUMF No. 79. In addition, in response to Steadfast’s SUMF Nos. 18 to 44, wherein Steadfast described detections on dates prior to the inception of the Policy of some level of TCE and DCE and Dioxin at residences on H. Foote Road, other than number 65, Casella responded that “the Mass DEP Claim was not as a result of those detections.” In sum, Casella asserts that (1) it had no knowledge prior to September 2015 of pollution migrating to 65 H. Foote Road, and (2) the “claim” occurred as a result of what was discovered in September 2015 at 65 H. Foote Road, and absent the discovery at 65 H. Foote Road there would have been no claim. The latter assertion will, ultimately, depend on Casella’s ability to prove what would have occurred in a hypothetical situation: i.e., if only the Dioxane test results for 74 and 81 H. Foote Road had been reported rather than in combination with the severe readings of TCE and DCE from 65 H. Foote Road. I find that the facts asserted by Casella, as to Steadfast denied coverage under the Policy for this potential claim based upon the “known pollution event” exclusion. While these events are recited at ¶¶ 35 to 37 of the Complaint, Casella asserts no claim in this lawsuit arising from this correspondence. 7 the lack of any enforcement by DEP prior to the October 2015 report of findings at 65 H. Foote Road, and the immediate assertion of a claim arising after the October 2015 report, give rise to a reasonable inference that the claim by DEP resulted from a “new pollution event” at 65 H. Foote Road.3 The reasonable inference may be rebutted by evidence in the correspondence and otherwise indicating that DEP required remedial action with respect to 74 and 81 H. Foote Road, but a triable issue is presented. Moreover, it may be that some of the “claim” asserted by DEP resulted from pollution at locations other than 65 H. Foote Road as to which Casella was aware prior to 2015. In that case, a question of allocation of cleanup costs to a covered claim (65 H. Foote Road) and other locations that may not be covered because of the “known pollution event” exclusion, may have to be determined. Summary judgment is not available to decide those fact issues. CONCLUSION For the reasons stated above, Steadfast’s Motion for Summary Judgment is DENIED. By the Court, Edward P. Leibensperger Justice of the Superior Court Date: September 7, 2017 3 A “new pollution event” is defined in the Policy to mean “a ‘pollution event’ that first commences after the ‘delimitation date.’” The delimitation date is April 30, 2015. 8read more

This is an action challenging an independent appraisal of property as provided by an agreement between the parties, two sophisticated entities with experience in owning and leasing real estate. The plaintiff, Buffalo Water 1, LLC (Buffalo) is the owner of the property, located at 7 Water Street in downtown Boston (the Property). The defendant Fidelity Real Estate Company LLC (Fidelity) occupied the Property under a long term lease with an option to purchase the Property in the final year of the lease as set forth in an Option Agreement. The Option Agreement sets the purchase price at 95 percent of the “fair market value” (FMV) or $ 16,275,000, whichever is greater. If the parties could not agree upon the FMV, the Option Agreement set forth the specific appraisal process that the parties were to follow. Fidelity timely exercised its option to purchase and, with the parties unable to agree to the FMV, complied with the appraisal process, which included an independent appraisal. The Verified Complaint attacks the validity of the independent appraisal, contending among other things that the entity that employed the individual appraiser did not disclose a prior business relationship that it had with Fidelity.read more

1 COMMONWEALTH OF MASSACHUSETTS SUFFOLK, ss. SUPERIOR COURT CIVIL ACTION NO. 2016-00045 BLS1 PHILADELPHIA INDEMNITY INSURANCE COMPANY vs. NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA MEMORANDUM OF DECISION AND ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT Plaintiff Philadelphia Indemnity Insurance Company (PIIC) and defendant National Union Fire Insurance Company (National Union) each issued insurance policies to North Suffolk Mental Health Associated, Inc. (North Suffolk). PIIC issued a Commercial General Liability (CGL) policy; and National Union issued a Workers’ Compensation and General Liability (Workers’ Comp.) policy. In a case filed in the Middlesex Superior Court in 2011, captioned Estate of Stephanie Moulton v. Nicholas Puopolo, et al. (the Underlying Action), the plaintiff estate brought suit against eighteen directors of North Suffolk (the Director Defendants) asserting claims arising out of the work related death of Ms. Moulton, a North Suffolk employee. The Director Defendants tendered the claim to both PIIC and National Union. PIIC defended the claim (under a reservation of right) and National Union declined coverage. The Director Defendants’ motion to dismiss the Underlying Action was eventually allowed, after appeal to the Supreme Judicial Court (SJC). See Estate of Moulton v. Puopolo, 467 Mass. 478 (2014) (Moulton). In this action, PIIC has filed suit against National Union asserting claims for 2 declaratory judgment and equitable subordination and seeking to recover the cost of its successful defense of the Underlying Action. The case is now before the court on the parties’ cross-motions for summary judgment. For the reasons that follow, National Union’s motion is ALLOWED, and PIIC’s motion is DENIED. ADDITIONAL FACTS The following additional facts are undisputed. Ms. Moulton was an employee of North Suffolk, a charitable corporation that provides mental health and rehabilitation services. She was assaulted and killed by a patient while performing her job. As explained in Moulton, her estate (the Estate) filed the Underlying Action against the directors of North Suffolk and others. It alleged claims for willful, wanton, reckless, malicious and grossly negligent conduct and, also, as to the Director Defendants, breach of fiduciary duty. The complaint alleged that the Director Defendants “effectuated” policies and failed to “effectuate” other policies that caused Ms. Moulton’s death. Id. at 480. They “moved to dismiss the complaint chiefly on the grounds that, with respect to the wrongful death action, they are immune from suit, as Ms. Moulton’s employer, under the exclusive remedy provision, G.L.c. 152, § 24 of the Workers’ Compensation Act (act), and, with respect to the breach of fiduciary duty claim, they owed Moulton no such duty.” Id. The Superior Court denied the motion to dismiss; the director defendants sought interlocutory review under the doctrine of present execution; and the case was transferred to the SJC. As relevant to this case, the SJC found that: “The complaint, fairly read, alleges that the Director Defendants, acting qua directors rather than in any other capacity, set and enforced misguided and wrongful corporate policies that resulted in Mouton’s death while in the course of 3 her employment. There is no allegation that the directors undertook any action without a formal board meeting or vote, . . . to the extent that the complaint alleges that Moulton’s death arose from the adoption of or failure to adopt corporate policies, it alleges conduct by the charitable corporation that could have been occasioned only by the vote of its directors acting collectively as a board.” Id. at 488-489. It then held that, “we conclude that the director defendants were Moulton’s employer for purposes of the exclusivity provision of the act. As Moulton’s employer, the director defendants are therefore immune from suit for workplace injuries due to actions taken by the board.” Id. at 490-491.1 The Worker’s Comp. Policy The National Union Workers’ Comp. policy was in effect when the Moulton claim was asserted. It is a standard form of Worker’s Comp. policy issued in Massachusetts. It has two coverage parts. Part One provides for payment of any benefits “required of you by the workers compensation law;” and that National Union has “the right and duty to defend at our expense any claim, proceeding or suit against you for benefits payable by this insurance. . . . We have no duty to defend a claim, proceeding or suit that is not covered by this insurance.” Part Two provides Employers’ Liability Insurance. As explained by the SJC in HDH Corporation v. Atlantic Charter Ins. Co., 425 Mass. 433, (1997) (Atlantic Charter), the seminal decision addressing the coverage provided under a workers’ compensation policy, discussed at greater length infra: “Part Two, the employers’ liability portion of the insurance policy, is intended to provide coverage in the rare circumstance in which an employee who has affirmatively opted out [of the workers’ compensation benefits system at the time of hire] brings a tort action for personal injuries.” Id. at 439 n.11. 1 The SJC also held that, “as Moulton’s employer, the director defendants, acting as a board, had no fiduciary duty to her.” Id. at 493. 4 The declarations page of the Workers’ Comp. policy identifies North Suffolk as the named insured. There are no policy provisions or endorsements that broaden the definition of named insured to include directors, officers, or employees. DISCUSSION PIIC first argues that since, in Moulton, the SJC held that “the director defendants were Moulton’s employer for purposes of the exclusivity provision of the act,” they might also be insureds under the Workers’ Comp. policy, even though the policy terms do not extend coverage to them; or, at least, there is a “possibility” that they would be held to be insureds in a declaratory judgment action addressing coverage issues under the Workers’ Comp. policy. PIIC next argues that there then also exists a “possibility” that the claims asserted by the Estate in the Underlying Action were covered under either Part One or Part Two of the Workers’ Comp. policy coverage provisions. PIIC then goes on to cite Billings v. Commerce Ins. Co., 458 Mass. 194, 200-201 (2010) for the long established principle that: “In order for the duty of defense to arise, the underlying complaint need only show through general allegations, a possibility that the liability claim falls within the insurance coverage.” (Emphasis supplied.) According to PIIC, given this possibility of coverage, National Union had a duty to defend the Director Defendants in the Underlying Action. The court finds it doubtful that the SJC’s holding that, under the “so-called exclusivity provision of the act,” the directors of a corporation cannot be sued for work place injuries in the Superior Court, when they were alleged to have done nothing more than vote on corporate policies, could be interpreted to mean that the directors were additional insureds under a workers’ compensation policy. However, the court declines to address that argument. This is 5 because the SJC’s decision in Atlantic Charter clearly establishes that National Union’s Workers’ Comp. policy did not provide coverage for the claims asserted by the Estate in the Underlying Action. Claims Asserted under Part One of the Workers’ Comp. Policy In Atlantic Charter, an employee sued its former employer HDH Corporation (HDH) for personal injuries arising from her allegedly wrongful termination; her husband also asserted claims for loss of consortium. HDH tendered the claim to its workers’ compensation carrier, Atlantic Charter, which declined coverage. The case went to arbitration and the plaintiff employee recovered. HDH then sued Atlantic Charter, claiming coverage under Part One of the policy. The SJC explained the extent of coverage provided under Part One of a workers’ compensation policy as follows: The terms of Part One of the policy clearly limit defense and indemnity of the employer to claims for benefits required by the workers’ compensation statute. However, the employee brought a civil action seeking monetary damages, and made no claim for workers’ compensation benefits. Indeed, no matter what the allegations of the complaint, as a matter of law, workers’ compensation benefits cannot be recovered by instituting a civil action. A claim for benefits must be brought before the department and adjudicated through the statutorily prescribed workers’ compensation system. See Neff v. Commissioner of the Dep’t of Indus. Accs., 421 Mass. 70, 74 (1995) (describing procedural course for the adjudication of workers’ compensation dispute through the Department of Industrial Accidents). See also Alecks’ Case, 301 Mass. 403, 404 (1938) (under the workers’ compensation statute, an employee “acquires a right to compensation for personal injury as provided in that act, to be enforced by claim against the insurer filed with the Industrial Accident Board…. [T]he policy of the act is to deprive [the employee] of all right of action in tort against his employer for damages for an injury within the scope of the [workers’] compensation act”). The record demonstrates that a claim for benefits was never initiated by the employee, as mandated by G.L. c. 152, § 10. Accordingly, Atlantic is correct that it had no duty to defend the civil action because the complaint did not state a claim that could result in liability which Atlantic would be obligated to pay under any reasonable interpretation of Part One of the policy. See, e.g., Jimmy’s Diner, Inc. v. Liquor Liab. Joint Underwriting Ass’n of Mass., 410 Mass. 61, 65 (1991). 425 Mass. at 433. 6 In Atlantic Charter, the SJC also explained the important public policy considerations underlying the legislation that it was interpreting: Public policy also supports our decision. The fundamental purpose of the workers’ compensation system is to make funds more readily available to injured employees. Accordingly, the Commonwealth requires all employers to provide workers’ compensation benefits to their employees. See G.L. c. 152, § 25A. As amici point out, the cost of mandatory workers’ compensation insurance is a significant aspect of the business climate of the Commonwealth. Recent legislative reforms have sought to lower the insurance rates employers must pay to provide the security of workers’ compensation benefits to their employees. See St.1991, c. 398. Requiring workers’ compensation insurers to defend civil actions outside the workers’ compensation system would represent an unwarranted expansion of coverage historically understood as provided under this mandatory form of insurance, a result which would increase insurance costs for employers, and could gut the legislative scheme for workers’ compensation. See, e.g., La Jolla Beach & Tennis Club, Inc., supra at 44, 36 Cal.Rptr.2d 100, 884 P.2d 1048. Id. at 440. In the present case, Moulton’s estate made no claim to recover workers’ compensation benefits2; indeed, it did not sue North Suffolk, but rather its directors, in an obvious and unsuccessful attempt to recover damages and not the benefits provided under the act.3 PIIC’s argument that the SJC’s decision in Moulton overruled the express holding in Atlantic Charter that Part One of a workers’ compensation policy only provides coverage for workers’ 2 The workers’ compensation act has long been held to provide the exclusive remedy by which the estate of deceased employee can recover from his employer. See McDonnell v. Berkshire St. Ry. Co., 243 Mass. 94, 95 (1922) (“The employer who is insured under the workmen’s compensation act is relieved of all statutory liability, including that for death of an employee under the employers’ liability act”); Cozzo v. Atlantic Refining Co., 299 Mass. 260, 262 (1938) (“Nor can an action at law be maintained against such employer [i.e., one who is insured under the workers’ compensation law] to recover for the death of an employee resulting from such injury [i.e., one arising out of and in the course of his employment],” citing G. L. c. 152, 68); Ferriter v. Daniel O’Connell’s Sons, Inc., 381 Mass. at 528 (“We acknowledge that G. L. c. 152, 1[4] and 68, bar a deceased employee’s dependents from recovering under G. L. c. 229, 2 and 2B, for loss of consortium, as against an employer covered by G. L. c. 152”). 3 In Peerless Ins. Co. v. Hartford Ins. Co., 48 Mass. App. Ct. 561 (2000), decided shortly after Atlantic Charter, the Appeals Court addressed a coverage dispute between an employer’s general liability insurer and its workers’ compensation insurer very much like the dispute presented by this case. There the estate of a deceased employee sued the employer. The workers compensation carrier denied coverage and the general liability carrier defended the claim. The Appeals Court held that because the estate could not bring a claim against the employer for workers compensation benefits or for wrongful death, the workers’ compensation carrier had no duty to defend and no obligations to the general liability carrier. 7 compensation benefits, and those benefits can only be claimed in the Department of Industrial Accidents, simply does not parse. In holding that the Estate could not bring an action against the Director Defendants based on allegations that they had voted to adopt corporate policies that allegedly contributed to Ms. Moulton’s death, the SJC was clearly not expanding the coverage provided by workers’ compensation policies. It was also not seeking to “gut” the public policy considerations underlying the statutory scheme, which were intended to reduce the costs of this mandatory insurance coverage, by saddling workers compensation insurers with potential additional costs unrelated to the employee benefits mandated by the act. Indeed, in Moulton, the SJC was not addressing insurance at all. It was only concerned with whether the Director Defendants were subject to suit at common law by an injured employee. In a somewhat round about argument, PIIC suggests that the Appeals Court’s decision in Norfolk & Dedham Mutual Fire Ins. Co. v. Cleary Consultants, Inc., 81 Mass. App. Ct. 40 (2011) (Norfolk & Dedham) supports its position. In furtherance of its arguments that the claims asserted in the Underlying Action were not covered, National Union quoted the following sentence from Atlantic Charter: “Indeed, no matter what the allegations of the complaint, as a matter of law, workers’ compensation benefits cannot be recovered by instituting a civil action.” 425 Mass. at 439. PIIC argues that in Norfolk & Dedham, the Appeals Court noted that an insurer that provided coverage for slander, libel, and invasion of privacy could not disclaim coverage just because these common law claims were asserted together with claims for sexual harassment before the Massachusetts Commission Against Discrimination (MCAD). In fact, in that case, the Appeals Court held that those claims could be asserted as part of a claim for sexual harassment, because they are compensable under an award for emotional distress. The Court did go on to comment that even if the claims were “viewed as a misguided effort to adjudicate 8 claims of slander and invasion of privacy in an improper forum, that would not affect Norfolk’s duty to defend. An insurer’s obligation to defend is not limited to valid claims; it extends even to claims potentially dismissible for lack of subject matter jurisdiction.” 81 Mass. App. Ct. at 48-49. This comment, of course, has no bearing on the statutory scheme for workers’ compensation benefits, in which a workers compensation policy insures only those benefits provided by the act, benefits that can only be awarded by the Department of Industrial Accidents. Obviously, a covered claim filed in the wrong court still gives rise to a duty to defend. An insurer could not disclaim a duty to defend because a plaintiff mistakenly filed an action in federal court, when there was no federal jurisdiction, but the policy covered the injury alleged in the complaint. A worker’s compensation insurer does not have a duty to defend a claim filed in Superior Court for damages that are expressly not covered under the workers’ compensation system. Claims Asserted under Part Two of the Workers’ Comp. Policy At oral argument, PIIC acknowledged that its principle argument that the “possibility” of coverage existed and this triggered National Union’s duty to defend was based on Part One of the coverage provisions. It nonetheless also asserted that a duty to defend arose under Part Two. Here, PIIC does not argue that Moulton overturned that part of Atlantic Charter in which the SJC stated that: “Part Two, the employers’ liability portion of the insurance policy, is intended to provide coverage in the rare circumstance in which an employee who has affirmatively opted out brings a tort action for personal injuries.” Rather, PIIC argues that the Estate’s amended complaint “included claims for funeral expenses, as well as for wrongful death and pain and suffering without reference to the Wrongful Death Act, and did not indicate whether Moulton’s parents were dependent upon her for financial support. Those claims arguably fell within the 9 scope of claims subject to G.L. c. 152, §§ 33, 31 and/or 32, respectively, but were presumably intended to circumnavigate the Workers’ Compensation statute entirely and therefore [because there was no allegation that Moulton had waived her rights to workers’ compensation benefits] left open the question whether Moulton had preserved her common law rights in lieu of accepting Worker’s Compensation benefits.” In consequence, until it could be established that Ms. Moulton had not affirmatively opted out of workers’ compensation coverage when she began work at North Suffolk, the possibility that claims asserted in the amended complaint were covered by the Workers’ Comp. policy existed. However, in Moulton, the SJC summarily dismissed the suggestion that an employer/defendant had to assert non-waiver of workers’ compensation benefits as an affirmative defense. It explained that the statute (G.L. c. 152, § 24) expressly provides that the employee “shall be held to have waived his right of action at common law,” if he does not provide a written notice that he is claiming his right to opt out at the beginning of his employment. Therefore, non-waiver is not an affirmative defense, but rather it is the plaintiff that must allege in the complaint that the “right to payment under the act” was waived. 467 Mass. at 484 n. 12. This was not pled in the Estate’s amended complaint (nor could it be,) and therefore the complaint alleged no facts even suggesting a claim covered by workers’ compensation insurance. “When the allegations in the underlying complaint lie expressly outside the policy coverage and its purpose, the insurer is relieved of the duty to investigate and defend the claimant.” Herbert A. Sullivan, Inc. v. Utica Mut. Ins. Co., 439 Mass 387, 394-395 (2003) (Internal citations and quotations omitted.) Moreover, the issue now before the court is not whether the Estate stated a cause of action against the Director Defendants that could possibly survive a motion to dismiss. This is a 10 coverage case between two insurers. PIIC issued a comprehensive general liability policy to its insured, North Suffolk. It is claiming a right to equitable subrogation or contribution from National Union in its capacity as North Suffolk’s workers’ compensation carrier. Its rights to recover against National Union are no greater than North Suffolk’s rights to demand that National Union defend the Underlying Action. Clearly, North Suffolk could not demand coverage based on the absence of an allegation that Ms. Moulton had affirmatively opted out of her rights for workers’ compensation benefits, knowing full well that she had not. ORDER For the foregoing reasons, National Union’s motion for summary judgment is ALLOWED and PIIC’s moiton for summary judgment is DENIED. Final judgment shall enter dismissing the complaint. _______________________ Mitchell H. Kaplan Justice of the Superior Court Dated: June, 13 2017read more

NOTICE: All slip opinions and orders are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports. If you find a typographical error or other formal error, please notify the Reporter of Decisions, Supreme Judicial Court, John Adams Courthouse, 1 Pemberton Square, Suite 2500, Boston, MA, 02108-1750; (617) 557-1030; SJCReporter@sjc.state.ma.us

SJC-12191

ROBERT GEORGE & others[1]vs. NATIONAL WATER MAIN CLEANING COMPANY & others.[2]

NOTICE: All slip opinions and orders are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports. If you find a typographical error or other formal error, please notify the Reporter of Decisions, Supreme Judicial Court, John Adams Courthouse, 1 Pemberton Square, Suite 2500, Boston, MA, 02108-1750; (617) 557-1030; SJCReporter@sjc.state.ma.us

COMMONWEALTH OF MASSACHUSETTS SUFFOLK, ss. SUPERIOR COURT. 1584CV00149-BLS2 ____________________ THE GILLETTE COMPANY v. CRAIG PROVOST, JOHN GRIFFIN, WILLIAM TUCKER, DOUGLAS KOHRING, and SHAVELOGIC, INC. ____________________ MEMORANDUM AND ORDER DENYING PLAINTIFF’S MOTION TO REPORT SUMMARY JUDGMENT DECISION PURSUANT TO RULE 64 In prior rulings, the Court dismissed or granted partial summary judgment against all of The Gillette Company’s claims. Most recently the Court decided that the remaining Defendants are entitled to summary judgment on Gillette’s claims that four of its former employees helped ShaveLogic, Inc., develop a new disposable cartridge shaving razor using Gillette’s confidential information. The only remaining claims to be decided are ShaveLogic’s counterclaims that Gillette intentionally interfered with prospective business relations and violated c. 93A, by threatening to bring and then filing baseless legal claims in an attempt to keep ShaveLogic from entering the market for so-called wet-shaving products. When the Court granted partial summary judgment in Defendants’ favor on Gillette’s “confidential information” claims, it did not enter separate and final judgment under Mass. R. Civ. P. 54(b) because doing so would be inconsistent with the appellate courts’ strong policy against piecemeal appeals.1 Gillette therefore has no right to appeal the Court’s interlocutory decision granting partial summary judgment in Defendants’ favor on what had been Gillette’s remaining claims.2 Gillette has now asked the Court to report its summary judgment decision for interlocutory appellate review under Mass. R. Civ. P. 64(a). The Court will DENY this request for the reasons discussed below. 1 See Long v. Wichett, 50 Mass. App. Ct. 380, 388-404 (2000) (separate judgment held inconsistent with “bedrock policy against premature and piecemeal appeals”). 2 See Morrissey v. New England Deaconess Ass’n—Abundant Life Communities, Inc., 458 Mass. 580, 594 (2010) (in absence of separate and final judgment, “no appeal can be taken from a trial judge’s partial ‘judgment’ on a claim prior to entry of a final judgment disposing of all claims against all parties to the action”). – 2 – Rule 64(a) authorizes a trial court to report an interlocutory order to the appeals court for immediate review. However, “[s]uch a report should be reserved for novel and difficult issues, the appellate decision of which may expedite resolution of the case.” Morrison v. Lennett, 415 Mass. 857, 859 (1993). “Interlocutory matters should be reported only where it appears that they present serious questions likely to be material in the ultimate decision, and that subsequent proceedings in the trial court will be substantially facilitated by so doing.” Globe Newspaper Co. v. Massachusetts Bay Transp. Auth. Ret. Bd., 412 Mass. 770, 772 (1992), quoting John Gilbert Jr. Co. v. C.M. Fauci Co., 309 Mass. 271, 273 (1941). Gillette argues that the summary judgment decision in this case turned on the resolution of two unsettled questions of law that should be reviewed by the Appeals Court before ShaveLogic’s counterclaims go to trial. The Court is not convinced. 1. Third-Party Patent Disclosures. Gillette believes that the Court erred in ruling that disclosure of a design concept by a third-party in a patent establishes that the concept is not confidential. Although Gillette concedes that a third-party patent disclosure defeats any claim of confidentiality if the disclosure is well known to others, it argues that information can still be protected as confidential if it is disclosed in an obscure third-party patent that is not generally known in the relevant field. This issue does not warrant an interlocutory report and review for two reasons. To begin with, the principle that a business cannot seek to protect as confidential any information that is known by someone outside the business, even if it is not generally known in the industry, is well established under Massachusetts law. See, e.g., Augat, Inc. v. Aegis, Inc., 409 Mass. 165, 170 (1991) (sales volume “known outside the business” by several securities analysts was not confidential). For example, an employee is free to carry away his or her memory of customers’ names, needs, and habits and to use that information to solicit business from those very customers. Such “remembered information” is not confidential because the information itself, as distinguished from an employer’s compilation of such information into a list or database, is known to the customers and thus not kept secret by the employer. American Window Cleaning Co. of Springfield, Mass. v. Cohen, 343 Mass. 195, 199 (1961) (“Remembered information as to the plaintiff’s prices, the – 3 – frequency of service, and the specific needs and business habits of particular customers was not confidential.”); accord Woolley’s Laundry v. Silva, 304 Mass. 383, 391-392 (1939); May v. Angoff, 272 Mass. 317, 320 (1930). There is no good reason why the sharing of information with a few securities analysts as in Augat, or between one customer and one service provider as in American Window, would destroy any claim of confidentiality but disclosure of information in a public patent would not. In any case, the legal question flagged by Gillette regarding third-party patent disclosures is immaterial because Gillette concedes that the general concepts of designing razors using a front-loading engagement, a magnetic attachment, or an elastomeric pivot are not confidential to Gillette. In its prior decision, the Court noted that Gillette had made this concession during the summary judgment oral argument. It nonetheless went on to explain why the undisputed summary judgment record was consistent with Gillette’s concession. The Court discussed third-party patent disclosures only as part of its explanation of why it made sense for Gillette to concede that these three general design concepts were not confidential. Those parts of the Court’s decision played no other role in its analysis. More recently, during oral argument on Gillette’s motion for a report under Rule 64, Gillette expressly reiterated its concession that these general design concepts are not confidential as a matter of fact. It therefore does not matter whether the Court’s prior discussion of third-party patent disclosures was correct or incorrect as a matter of law. As the Court explained in its prior summary judgment ruling, the ShaveLogic defendants were entitled to judgment in their favor as a matter of law because Gillette could not muster any evidence any evidence that ShaveLogic used any Gillette confidential information in developing any product. That prior ruling did not turn on any novel and difficult issue of law. It turned Gillette’s inability to any present evidence to support its claims. Gillette reiterates its prior argument that the expert opinion of its expert witness, that misuse of Gillette confidential information gave ShaveLogic a head start in designing its razor, creates a triable jury question. That argument is still incorrect for the reasons that the Court discussed in its prior decision. Although Gillette’s expert opined that Defendants must have used Gillette confidential – 4 – information to design ShaveLogic’s razors, he reached that conclusion based on his mistaken assumption that the general design concepts of front-loading engagements, magnetic attachments, and an elastomeric pivot or loop are confidential information that belong to Gillette. That assumption was incorrect, as Gillette again conceded during oral argument on its Rule 64 motion for a report. In sum, since Gillette’s arguments regarding the legal significance of third-party patent disclosures are completely immaterial—in light of Gillette’s repeated concession that the concepts of front-loading engagements, magnetic attachments, and elastomeric pivots are not confidential—they provide no reason to report the summary judgment decision for interlocutory appellate review. See Globe Newspaper Co., 412 Mass. at 772-773 (discharging report because appeal from interlocutory decision would not dispose of central issue material to ultimate decision). 2. Obvious Combination of Disclosed Razor Design Features. The second issue that Gillette believes merits interlocutory appellate review concerns the Court’s prior ruling that, given the evidence that the ideas of designing a razor using a front-loading engagement with the razor cartridge or of attaching the cartridge to the handle at a single point were both well-known in the industry, it would have been obvious to anyone skilled in the art that one could combine the two concepts and design a front-end loading razor that attaches to the cartridge at a single point. Gillette contends that the Court made an error of law because obviousness plays no part in whether information is confidential under Massachusetts law. It also contends that the Court made an error of fact because no record evidence demonstrated that such a combination was obvious. Neither of these contentions justifies interlocutory review of the summary judgment decision. With respect to the first point, the principle that obvious concepts are not confidential does not raise any novel or difficult question of law that would merit interlocutory review. Obvious engineering or design concepts are not confidential information. See Dynamics Research Corp. v. Analytic Sciences Corp., 9 Mass. App. Ct. 254, 267 (1980) (concepts that would be obvious to an inertial guidance engineer were not protectable as trade secrets). Since obvious concepts are not confidential, obvious combinations of them are not confidential either. See Strategic Directions – 5 – Grp., Inc. v. Bristol-Myers Squibb Co., 293 F.3d 1062, 1065 (8th Cir. 2002) (obvious combination of known elements not a trade secret); Julie Research Labs., Inc. v. Select Photographic Eng’g, Inc., 998 F.2d 65, 67 (2d Cir. 1993) (particular combination of design choices not a trade secret if “obvious, widely known, easy for others to discover legitimately, or disclosed” publicly by manufacturer). With respect to the second point, the Court’s prior opinion was not as clear and precise as it should have been. The issue before the court was not whether the summary judgment record demonstrated that combining front-loading engagements and a single point of attachment was an obvious design option. Rather, the issue was whether Gillette could present any evidence that such a combination was not obvious. This is not a patent infringement case, in which a defendant charged with infringement would have the burden of proving that a particular patent claim was obvious and thus not patentable. Instead, Gillette had the burden of proving its claims that Defendants misused Gillette’s confidential information, which includes the burden of proving that any concepts reflected in ShaveLogic’s razor designs would not have been obvious to someone skilled in the art. As a result, Gillette’s failure to muster any evidence that a combination of the well-known concepts of front-loading engagements and single points of attachment was not obvious means that Defendants were entitled to summary judgment on that aspect of Gillette’s claims. See Kourouvacilis v. General Motors Corp., 410 Mass. 706, 715 (1991) (“If the nonmoving party cannot muster sufficient evidence to make out its claim, a trial would be useless and the moving party is entitled to summary judgment as a matter of law.” (quoting Celotex Corp. v. Catret, 477 U.S. 317, 328 (1986) (White, J., concurring)). ORDER Plaintiff’s motion to report the recent summary judgment decision under Mass. R. Civ. P. 64 is DENIED. June 9, 2017 ___________________________ Kenneth W. Salinger Justice of the Superior Courtread more